Methods by Which Insurers May Minimize or Avoid Catastrophic Losses

question 21

Multiple Choice

Methods by which insurers may minimize or avoid catastrophic losses include which of the following?
I.The use of reinsurance
II.Concentrating coverage written in one geographic region

• A)I only
• B)II only
• C)both I and II
• D)neither I nor II

---

Definitions:

Interest Annually

Interest annually refers to interest that is calculated and added to the principal balance once per year.

Term Deposit

A bank deposit that has a fixed term and typically offers a higher interest rate than savings accounts.

Credit Union

A member-owned financial cooperative that provides traditional banking services.

Simple Interest

Interest calculated only on the principal amount, or the original sum of money borrowed or invested, without considering the effect of compounding over time.